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If you ever find yourself questioning the power of a well-defined brand identity, just look at companies like Coca-Cola and Nike. These giants are known for not only their products, but the emotions and stories associated with their unique brand identities: Coca-Cola is not simply a beverage, but a symbol of joy and unity; Nike’s ubiquitous swoosh logo and and “Just Do It” slogan are a celebration of determination and resilience. Such brands highlight the lasting influence of brand marketing, demonstrating its ability to shape consumer behavior and brand perceptions over extended periods of time.
Despite brand marketing’s time-proven effectiveness, performance marketing has captured the spotlight in recent years. With its focus on driving specific actions or results, as well as its ability to provide near-immediate measurement and attribution insights, many marketing teams have shifted their focus from brand building efforts to performance tactics. And given the mounting pressure on CMOs and advertising leaders to show the financial impact of their marketing efforts, the clear and tangible metrics offered by performance marketing hold significant appeal.
But such a narrow focus on performance tactics can lead brands and advertising teams to get stuck in a loop at the bottom of the funnel—one in which marketers may be driving short-term sales, but are doing little to build long-term brand identity and awareness. And emerging research is providing insight into the true value that brand building efforts can yield, demonstrating the need for marketing and advertising leaders to reconsider the connection between brand building and performance marketing, as well as how they communicate the value of these combined advertising efforts to key stakeholders.
In today’s digital age, performance marketing has become a dominating force. As advertising leaders face increasing pressure to demonstrate tangible returns on marketing investments—particularly after the economic turbulence of the past several years—performance marketing offers clear, measurable, and swift results, allowing companies to justify their marketing spend and optimize for maximum return on investment.
Brand building, with its focus on fostering long-term brand equity and emotional connections with consumers, often requires delayed gratification in terms of both seeing and measuring its impact. For smaller brands and clients, in particular, it can be difficult to justify these longer-term investments, as stakeholders want to see performance and assess its impact right away. Unfortunately, this has led many leaders to take an “either/or” approach to brand and performance marketing, rather than seeing them as complementary strategies. However, such a disparate approach to these marketing strategies can have negative impacts for brands and advertisers—particularly in the long-term.
Research has shown that the long-term effects of marketing account for 60% of total ad spend ROI, where short-term effects make up only 40%. If advertising teams focus all their investments on short-term performance tactics, they’re going to miss out on those potential long-term gains.
As such, taking a unified approach to brand and performance marketing is a must. As leaders reconsider their approach to this divide, it can be helpful to rethink the language used to describe these marketing approaches: All marketing—regardless of what it is labeled—is aimed at driving performance. Branding efforts are still performance, it just takes more time to measure and quantify their impacts.
Even more, taking a performance approach to brand marketing can be a helpful way to bridge the disconnect between brand vs. performance tactics. By calling it performance branding, and then having a measurement plan to back it up, leaders can more clearly demonstrate the value of brand advertising efforts.
And just what, precisely, is that value? According to the MMA’s Brand as Performance research series, brands that invested in brand building and increasing favorability with consumers saw a four times increase in sales lift and a five times increase in penetration lift. Brands with higher awareness also drive growth more efficiently than those with lower awareness—in other words, the stronger the brand awareness, the further each dollar of lower-funnel ad spending will go. And additional research has demonstrated that the long-term ROI of advertising is double the short-term ROI, further showing the value of investing in brand building alongside more lower-funnel efforts.
By recognizing the complementary nature of brand building and performance marketing and remembering that all advertising is intended to drive performance, leaders can increase their ROI and drive results in both the short and long term. They can also avoid the consequences of neglecting brand building in pursuit of immediate returns.
To effectively harness the power of brand marketing and maximize its full potential, leaders first need to be open to investing in brand building efforts.
For those on the fence or hesitant to move budgets away from more short-term tactics, it can be helpful to find small opportunities for testing. For example, marketers might choose to increase brand efforts in just a few markets via awareness-building video, then measure and assess the impacts over a few months and use the results to justify further brand-focused investments moving forward.
Once leaders are in a place where they are prepared to strike a balance between more traditional “performance” and brand building media investments, the question becomes: How much spending should go towards those shorter-term tactics vs. long-term brand marketing efforts? The answer will vary significantly by brand and client, and requires research based on a given brand, what’s happening in that brand’s category, what its competitors are doing, how consumers are behaving, and more. It also requires an openness to testing and learning to determine what mix is most beneficial for driving desired results.
For instance, let’s say you’re a B2B company. Research shows that, at any given time, 95% of potential buyers in the B2B space are not actively looking to make a purchase. But just because these customers are “out-market” now doesn’t mean they shouldn’t be advertised to. When it comes time for these consumers to make a purchase decision, they are probably going to gravitate towards the companies and brands they are familiar with—in other words, those advertisers who have invested in brand building efforts. Rather than only trying to connect with these audiences during the short and infrequent windows when they’re actually “in-market,” B2B brands should invest in long-term tactics to build awareness and familiarity so that, when it’s time for these audiences to make a purchase decision, their brand is top-of-mind. As such, for B2B companies, having a media mix that skews more heavily towards brand building often makes sense.
For a B2C company, on the other hand, it might drive better ROI to strike a greater balance between brand building and performance marketing tactics. These companies want to ensure they’re both generating sales in the short-term and building brand awareness and identity in the long-term to drive repeat purchases and brand loyalty, and they often aren’t dealing with the longer purchase cycles that B2B brands face.
Though the balance between performance and brand building media may vary, there are certain elements that are critical for all brand marketing efforts. Perhaps most fundamental is the development of compelling and consistent creative that resonates with target audiences. The primary goal of brand marketing is to establish and enhance the perception, awareness, and identity of a brand among target audiences, so taking the time to craft strong creative, A/B test it, and optimize it is crucial. Consistency is another key element of effective brand efforts, as it ensures that consumers receive a coherent and unified brand experience across various touchpoints, reinforcing brand identity and fostering trust and recognition. By maintaining consistency in messaging, visuals, and tone, brands can build familiarity and loyalty among their target audience, ultimately driving brand equity and long-term success.
Though performance marketing has garnered significant attention and investment by advertising leaders in recent years, neglecting brand marketing can have negative long-term impacts—particularly since brand efforts can amplify the results of performance marketing tactics. Brand and agency leaders seeking both short- and long-term results should take a more unified approach and consider how all their media drives performance. In doing so, marketers can maximize ROI on all their advertising investments.